Question 14 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 14 Chapter 6 - Unimax Class 12 Part 1 - 2021

14. X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Y retires selling his share of Goodwill to X and Z for Rs. 16000 ; Rs. 10000 being paid by X and Rs. 6000 by Z. The profit for the year after Y’s retirement is Rs. 24000. Pass necessary journal entries to :

1. Sale of Y’s share of Goodwill to X and Z.
2. Distribute the profit between X and Z.

The solution of Question 14 Chapter 6 - Unimax Class 12 Part 1: -

Journal

Date	Particulars		L.F.	Debit	Credit
	X’s Capital a/c	Dr.		10,000
	Z’s Capital A/c	Dr.		6,000
	To Y’s Capital a/c				16,000
	(Being amount transferred from gaining partner’s capital accounts to retiring partner’s capital a/c on account of goodwill)
	Profit and loss appropriation a/c	Dr.		24,000
	To X’s Capital A/c				17,000
	To Z’s Capital a/c				7,000
	(Being profits distributed between X and Z in their new profit sharing ratio)

Working Note:

(i) Calculation of Gaining Ratio :
As X has transferred Rs. 10000 and Z has transferred Rs. 6000 to Y’s Capital a/c (on account of goodwill), therefore gaining ratio of X and Z is 5 : 3 (10000 : 6000).
(ii) Calculation of new profit sharing ratio :
X’s new share = Old share + gain
= 3/6 + (5/8 of Y’s share)
= 3/6 + (5/8 of 2/6)
= 17/24
Z’s new share = Old share + gain
= 1/6 + (3/8 of Y’s share)
= 1/6 + (3/8 of 2/6)
= 7/24
New profit sharing ratio = 17 : 7 (X : Z)

https://tutorstips.com/retirement-of-a-partner-explained-with-illustration/

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication